4 A Example 14.5: JN Min Corporation a calendar-year company borrowed S1 000 000 on August 15, 2015 The note specifies an 8% interest rate and is due in three years. Interest ispa gar erty. The fiscal year ends on December 31. The current market rate is 12%. Interest is compounded quarterly. IN Min prepares quarterly financial statements. Prepare the amortization table for the note and the journal entries for 2015 FV Excel Fomula 9 Given 10 Solve for PV 12300% 20,000 1,000,000 900,460 PV00 03,12-20000,-1000000 When we issue this notes payable, we promise to pay (1) Cash Interest every quarter Face Value of the Notes Payable x Qaurterly stated rate 12) Principal of $1,000,000 at the end of the 3rd year Every Quarter we will pay cash interest Annual Market Interest Rate Quarterly Market interest Rate Quaterly Stated interest Rate Number of Quarters 12% 19 Annual Stated Interest Rate FV 8% 21 Years Face Value of the Notes Payable Sheetl Face Value of the Notes Payable he notes payable is issued at a discount of Present Value of the Notes Payable Face Value Present Value of the Notes Payable Prior Carrying Value x Quarterly Market Interest Rate Effective Interest Carrying Value (Prior CV + Discount amortized) Initial CV PV of the Notes Payable Period Date Cash Interest Discount Amortized 0 8/15/2015 1 11/15/2015 2 2/15/2016 3 5/15/2016 4 8/15/2016 5 11/15/2016 6 2/15/2017 7 5/15/2017 8 8/15/2017 9 11/15/2017 10 2/15/2018 11 5/15/2018 12 8/15/2018 z Face Value Sheet1 e here to search